Temiscaming, Quebec, Canada, 11 April 2011 – Tembec today announced that it will proceed with construction of a pilot plant for the development of a high performance structural product known as Next Generation Sustainable Fibre (Next Gen). This project is based on an innovative, Tembec-patented process that will use Tembec’s Forest Stewardship Council (FSC) certified pulp and FSC certified lignosulfonates within a modified phenolic resin to produce a structural material with unique strength-to-weight and durability characteristics.

“The Next Generation Sustainable Fibre initiative recognizes the growing demand for environmentally friendly, lightweight structural composites suitable for applications in such areas as infrastructure and engineered components,” said Randy Fournier, senior vice president, Chemical Products and Kraft Pulp. “Our initial end-use application will be a railway tie for environmentally sensitive areas, with other applications such as automotive components, land and marine transportation infrastructure, and electrical energy generation and transmission infrastructures to be assessed.”

The cost of the pilot plant is estimated at approximately CAD 8.4 million, with the majority of the funding being provided equally by the Quebec and federal governments. Support from the Province of Quebec in the amount of CAD 3.45 million will come from the Ministère des Ressources naturelles et de la Faune, through FPInnovations, and the Ministère du Développement économique, de l'Innovation et de l'Exportation. Federal funds of CAD 3.45 million will come from Natural Resources Canada/FPInnovations, through the Federal Transformative Technologies Pilot Scale Demonstration Program.

“Tembec is among the world’s leaders in specialty pulp, and Next Generation Sustainable Fibre is a natural extension of the company’s product and technology development. Applications such as “Next Gen” offer the potential to continue the company’s focus on higher margins in less volatile businesses,” said James Lopez, president and CEO of Tembec. “The project announced today, with timely and active support from the Quebec and federal governments, will allow this opportunity to be fully developed. It fits with the company’s strategy of building on core competencies such as our specialty pulp and chemical knowledge.”

Tembec is a large, diversified and integrated forest products company and a global leader in sustainable forest management practices. The company’s principal operations are located in Canada and France. Tembec’s common shares are listed on the Toronto Stock Exchange under the symbol TMB and warrants under TMB.WT. Additional information on Tembec is available at www.tembec.com.

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